Having a hobby makes you tap into your creativity, strengthens your cognitive functions, and makes you more productive and satisfied, according to experts interviewed by Fast Company. Yet, most employees today take less time off and hardly focus on anything outside their eight-to-five. Especially with the growing demand of the modern workplace, many find it hard to stop checking their emails even on the weekend. Even the small amount of time during lunch on a workday falls victim to this trend.
A survey published on CNBC found that 56% of office workers’ lunch breaks only last for half an hour or less. In fact, many employees today are caught up in their work so much that they end up skipping their lunch break or dining at their desks. However this is a huge waste, with Gala Bingo emphasizing the importance of using this hour – or any spare time for that matter – to take a break or do something that will excite you, like reading a book or learning a new language. But if you’re all about the ‘hustle,’ maybe picking up trading is the best hobby for you in your limited free time.
Given today’s ease of access to information, there are so many ways to learn stock and crypto trading. But having this many sources can be overwhelming. So, here are the most important things you must understand to start your hobby as a part-time (weekend and lunch break) trader:
What is crypto trading?
“Sell high and buy low” is the core principle of any kind of trading. You buy or sell stocks and capitalize on the daily price fluctuations to turn a profit. While active stock traders tend to look into the companies and markets in-depth to take advantage of monthly events, the aim of day-traders is to make a few bucks from hourly or daily price fluctuations. Unlike stocks, however, crypto trading is a 24-hour market and has lower barriers to entry. That’s why you can trade and turn a profit within the few minutes of your lunch break.
Where to start?
If it’s your first-time crypto trading, you just have to create and verify an account and you’re good to go. Next, you have to open up a wallet where you can store your assets. Remember to make sure they’re secure. With the rise of day trading apps like Binance and CoinBase, you can start buying and selling crypto as soon as you log in.
Important things to learn and consider
Create a trading plan. As with anything, planning is key in day trading. It’s just a simple document where you’ll put when and where you’re trading, when to buy and sell, and when do you double down on a position. This helps you create patterns and learn as you trade in the limited amount of time that you have. Trading needs a lot of practice, and a trading plan can help you stay organized and retain information as you go.
Beating the benchmark. The bottom-line goal of trading is to beat the market or benchmark indexes. For most stocks, that’s the Standard & Poor’s 500 index and the Nasdaq composite index for investing in tech companies. For crypto trading, the Crypto-10 Index is the most widely used benchmark. Measuring the results of your strategy is key in day trading, and looking at benchmarks is the best way to quantify it.
Learn about risk. As anyone will tell you, investing is a risky hobby. But not all risks are the same. As a hobbyist day trader, you might want to start with a demo account before putting your real money on the line. If your strategy doesn’t work for demo trading, it won’t work in real life.
Review your process. At the end of your daily trading, take a screenshot of your trades and review them by the end of the week. This way, you can refine your strategy. You can also look at strategies and mistakes that other traders have made such as those that engaged in crypto trading.
Carolyn Coley is a blockchain reporter. She joined Smartereum after graduating from UC Berkeley in 2018.
